SEOUL– The South Korean economy is feared to slow down on high inflation, sluggish exports and weaker private spending, the finance ministry said Friday.
The ministry gave the gloomy outlook in its December economic assessment report, called the Green Book, and it mentioned the possibility of an economic slowdown for the sixth month in a row in the monthly report.
“High inflation has continued, while the recovery of domestic demand has slowed down and exports and the economic sentiment have worsened, which raised concerns about an economic recession,” the report read.
In November, consumer prices, a key gauge of inflation, rose 5 percent on-year, compared with a 5.7 percent growth tallied a month earlier. But the country has experienced the price level higher than 5 percent for seven consecutive months.
Exports, the key growth driver, fell for the second consecutive month in November, and the decline accelerated from the previous month due mainly to the dwindling global demand for semiconductors amid the economic downturn.
The country also suffered a trade deficit for the eighth straight month on high global energy prices, ringing an alarm over its growth momentum.
Private spending has also shown signs of losing ground. In October, the country’s industrial output fell 1.5 percent on-month, or by the most in 30 months. Retail sales, a gauge of private spending, also skidded 0.2 percent on-month.
“The government will strive to stabilize prices and people’s daily lives while trying to reinvigorate exports and investment focusing on the private sector,” the ministry said.
“We will do our best to manage external and internal risks and to speed up moves to improve the economic fundamentals,” it added.
South Korea is facing multiple downside risks amid fast interest rate hikes by the United States and other major economies and the prolonged war between Russia and Ukraine.
Source: Yonhap News Agency